Sunday, August 1

California TIF revivals fail

In California they’re called redevelopment agencies. In Kansas they’re called tax increment financing (TIF) districts. California ended them, but there have been efforts at revival, writes Steven Greenhut in City Journal:

With little fanfare in late September, [California Governor Jerry] Brown vetoed a slate of six bills that would have revived, in one form or another, California’s redevelopment agencies (RDAs), which the governor eliminated last year. …

Redevelopment is a convoluted process that allows local governments to target supposedly blighted areas and then convert them into redevelopment “project areas.” Cities float debt to pay for major construction and infrastructure projects, which in practice means using the revenue to subsidize auto malls, movie theaters, and hotels. Redevelopment agencies then receive the “tax increment” — the increase in property tax revenues flowing from the project areas — to pay down the debt. …

City and county officials came to depend on redevelopment as a way to micromanage development decisions in their cities and boost their budgets. But seeking cash to close the state’s multibillion-dollar budget gap, Brown shut down the redevelopment agencies in 2011. Oddly, Republicans opposed Brown’s efforts — even though RDAs routinely abused private-property rights, using eminent domain on behalf of favor-seeking big developers.

California, the birthplace of TIF, has learned how expensive it is. We in Wichita and Kansas — at least most officeholders and bureaucrats — either haven’t learned the lesson, or don’t care.

More at Jerry Brown’s Accidental Legacy: Redevelopment in California remains dead—at least for now.